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EX-10.3 - Teleconnect Inc.v206637_ex10-3.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

October 15, 2010
 

Date of Report
(Date of earliest event reported)

Teleconnect Inc.
 


 
(Exact name of registrant as specified in its charter)

Florida
 
0-230611
 
90-0294361
(State or other
 
(Commission
 
(I.R.S. Employer
jurisdiction of
 
File Number)
 
Identification No.)
incorporation)
       

Oude Vest 4
4811 BD Breda
The Netherlands


(Address of principal executive offices)

Registrant's telephone number, including area code:  011-31-630-048-023


 (Former name and former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

 

DESCRIPTION
This is an amendment to a previously filed Form 8-K current report filed on October 19, 2010 related to the purchase of Hollandsche Exploitatie Maatschappij BV (“HEM”) by Teleconnect Inc. (“Teleconnect”).  This Form 8-K/A provides additional information in the form of audited financial statements of HEM and Willroot BV (previous 100% owner of HEM), as well as the English translation versions of the four purchase agreements related to this acquisition.

Section 1
Registrant’s Business and Operations

Item 1.01
Entry into a Material Agreement
 
On October 15, 2010, Teleconnect Inc. (“Teleconnect”) completed the acquisition of Hollandsche Exploitatie Maatschappij BV (HEM). HEM, a Dutch company established in 2007, that has developed the age validation system ‘Ageviewers’.  Teleconnect had previously disclosed its intention to acquire HEM in a Form 8-K current report filing dated May 4, 2010.

The purchase of HEM was subject to an assessment of the viability of HEM’s business plan by Teleconnect’s management.  Also, a special written meeting of the stockholders was called and 91.69% of the shareholders of the Company ratified the Board’s decision to complete this purchase.

Our assessment included, but was not limited to, an analyses of the employed technology and HEM’s intellectual property rights, as well as an analysis of the market. In addition, a report on the value of HEM and the launch readiness of Ageviewers were requested from independent third parties. During our assessment, HEM’s management demonstrated the viability of the Ageviewers solution by entering into contracts with over 20 alcohol outlets in The Netherlands for a period of 36 months – which was previously defined in HEM’s business plan as a milestone to be achieved before September 30, 2010.

On October 15, 2010, Teleconnect and HEM formalized a contract before a Public Notary in The Netherlands, whereby Teleconnect has purchased HEM in exchange for 12% of its outstanding share of common stock  – post issuance – of Teleconnect.

Teleconnect identified risk factors which could affect the success of HEM’s business.   For instance, the resistance from commercial parties that benefit from the sales of alcohol and tobacco is expected to be well organized. Teleconnect management believes that despite this possible resistance and other obstacles, an effective solution such as Ageviewers is likely to be implemented. Teleconnect expects that in due time, the Ageviewers system can play a prominent role in the prevention of sales of alcohol and tobacco to minors by retail businesses.

 
 

 

Item 3.02
Unregistered Sales of Equity Securities

On October 15, 2010, Teleconnect issued 675,505 shares of its restricted common stock in connection with its acquisition of Hollandsche Exploitatie Maatschappij BV (“HEM”) in reliance upon the exemption from registration provided by Section 4(2) under the Securities Act of 1933.  The beneficial owners of HEM, through its present company Wilroot BV which wholly owned HEM and which was purchased entirely by Teleconnect, were Sciarone Interim Sales BV, Marcus Communicatie BV, HITD Information Technology BV, and DLB finance & consultancy BV., who received 190,830 shares, 236,427 shares, 236,427 shares, and 11,821 shares of common stock of Teleconnect, respectively.  DLB Finance & Consultancy BV was already the owner of 291,180 shares of common stock before this new issuance.  Mr. Dirk L. Benschop is the owner of DLB Finance & Consultancy BV and is also a director and the President of Teleconnect Inc.

Section 9 – Financial Statements and Exhibits

Item 9.01 – Financial Statements and Exhibits

 
Item 9.1
Audited financial statements 2009-2010 of HEM
 
Item 9.2
Audited financial statements 2009-2010 of Wilroot B.V
 
Item 10.1
Transfer of shares agreement with DLB Finance and Consultancy B.V
 
Item 10.2
Transfer of shares agreement with HITD Information Technology B.V.
 
Item 10.3
Transfer of shares agreement with Marcus Communicatie B.V.
 
Item 10.4 
Transfer of shares agreement withSciarone Interim Sales B.V.

 
Signatures

 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 28, 2010
 
   
Teleconnect Inc.
 
   
/s/ Dirk L. Benschop
 
Dirk L. Benschop, President
 

 
 

 

Item 9.01 – Audited financial statements 2009-2010 of HEM

Annual accounts 2009/2010
at Etten-Leur

Hollandsche Exploitatie Maatschappij B.V.
at Etten-Leur

Ref. 11390/EIE/MLE/MCR/MSS/2009/2010/10
Waalwijk December 17, 2010

Contents
Pagina
   
Report of the auditors
 
1   General
1
2   Appropriated results
2
3   Financial position
4
4   Tax position
6
   
Financial statements
 
1   Balance as at September 30, 2010
9
2   Profit & loss account for the year 2009/2010
11
3   General
12
4   Notes to the balance sheet as at September 30, 2010
14
5   Notes to the profit & loss account for the year 2009/2010
22
   
Other information
 
1   Independent auditor's report
27
2   Profit appropriation
28
3   Establishment financial statements 2009
28
4   Recognition of the loss for 2009/2010
28
 
 
 

 

Hollandsche Exploitatie Maatschappij B.V.
Laakseweg 24
4874 LV Etten-Leur

Ref. 11390/EIE/MLE/MCR/MSS/2009/2010/10
Waalwijk December 17, 2010

Dear Sirs,

Herewith we report in draft on the annual accounts of Hollandsche Exploitatie Maatschappij B.V. regarding the financial year 2009/2010.

1.1 Board composition
The management of the company was as follows:
- director: Wilroot B.V. and Peck Management B.V.

1.2 Amendment of the articles association
There has been a change of the name and the year occured on December 21, 2009 through an amendment of the articles. The company is now called Hollandsche Exploitatie Maatschappij B.V.(formerly Hollandse Exploitatie Maatschappij B.V.). The reporting year runs from October 1, 2009 to September 30, 2010. Comparative figures include the period from January 1, 2009 to September 30, 2009.
 
 
1

 

2   Appropriated results
2.1 Development of income and expenses
The result after taxation has increased/decreased, with regard to the financial year 2009, with € 626,539 to negative € 1,266,046. A comparison between both financial years gives the following figures.The amounts have been derived from the profit and loss account.

   
2009/2010
   
2009
 
   
   
%
   
   
%
 
                         
Net turnover
    132,953       100       87,876       100  
Cost of sales
    183,104       137.8       120,079       136.7  
Gross operating result
    -50,151       -37.8       -32,203       -36.7  
Other operating income
    51,000       38.4       -       -  
Wages and salaries
    139,193       104.7       85,117       96.9  
Social security charges
    21,845       16.4       3,416       3.9  
Pension expenses
    1,081       0.8       -       -  
Depreciation tangible fixed assets
    65,333       49.1       9,330       10.6  
Other employee expenses
    121,189       91.2       36,317       41.3  
Accomodation expenses
    32,699       24.6       38,589       43.9  
Office expenses
    150,551       113.2       89,476       101.8  
Car expenses
    72,695       54.7       43,299       49.3  
Selling expenses
    142,115       106.9       35,607       40.5  
General expenses
    898,102       675.5       371,972       423.3  
Total operating expenses
    1,644,803       1,237.10       713,123       811.5  
Operating result
    -1,643,954       -1,236.50       -745,326       -848.2  
Financial income and expenses
    60,701       45.7       -55,738       -63.4  
                                 
Result on ordinary activities before taxation
    -1,583,253       -1,190.80       -801,064       -911.6  
Taxation on result of ordinary activities
    317,207       238.6       161,557       183.9  
Result after taxation
    -1,266,046       -952.2       -639,507       -727.7  
 
 
2

 

2. Analysis of the result
The development of the result 2009/2010 compared to 2009 can be analysed as follows:

   
2009/2010
 
   
   
 
The result has been positively influenced by:
           
Increase gross operating result
    33,052        
Decrease accomodation expenses
    5,890        
Increase interest and similar income
    194,492        
Decrease taxation on result on ordinary activities
    155,650        
              389,084  
The result has been negatively influenced by:
               
Increase wages and salaries
    54,076          
Increase social security charges
    18,429          
Increase pension costs
    1,081          
Increase amortization/depreciation tangible fixed assets
    56,003          
Increase other personnel expenses
    84,872          
Increase office expenses
    61,075          
Increase car expenses
    29,396          
Increase selling expenses
    106,508          
Increase general expenses
    526,130          
Increase interest and similar expense
    78,053          
              1,015,623  
Decrease result after taxation
            -626,539  
 
 
3

 

3   Financial position
3.1 Analysis of the available assets
The balance sheets can be summarized as follows:

   
9/30/2010
   
09/30/2009
 
   
   
   
   
 
Long term funds:
                       
Equity
    -2,648,396             -1,382,350        
Non-current liabilities
    4,947,021             2,708,021        
              2,298,625               1,325,671  
Long term investments:
                               
Intangible fixed assets
    86,694               56,765          
Tangible fixed assets
    248,765               132,477          
Non-current financial fixed assets
    669,689               352,482          
              1,005,148               541,724  
Working capital
            1,293,477               783,947  
This amount is applied as follows:
                               
Trade and other receivables
    1,820,584               1,120,962          
Cash and cash equivalents
    5               149          
              1,820,589               1,121,111  
Less: Short term liabilities
    527,112               337,164          
                                 
Working capital
            1,293,477               783,947  
 
 
4

 

3.2 Statement of source and application of funds

   
2009/2010
 
   
   
 
Increase
           
Net income
    -1,266,046        
Amortisation and depreciation
    63,989        
Cash flow
            -1,202,057  
Disposals tangible fixed assets
    5,544          
Borrowing banks and credit-institutions
    2,239,000          
              2,244,544  
              1,042,487  
Decrease
               
Investments in intangible fixed assets
    29,929          
Investments in tangible fixed assets
    185,821          
Increase in other financial assets
    317,207          
              532,957  
Difference working capital
            509,530  
 
 
5

 

4   Tax position
4.1 Taxable amount 2009/2010
The taxable amount for 2009/2010 has been calculated as follows:

   
2009/2010
 
   
   
 
             
Result before taxation
    -1,583,253          
Differences in valuation:
               
tangible fixed assets
    1,498          
Tax differences:
               
Tax addition on disposal fixed assets
    578          
Non-deductible expenses
    4,200          
Investment allowance
    -9,246          
              -4,468  
Taxable amount 2009/2010
            -1,586,223  

No company tax is to be paid over the taxable amount.

4.2 Carry back
As per September 30, 2010 the compensable losses amount to € 3,344,319.
These losses could be compensated within a term of nine years with future fiscal profits.
For these compensable losses a latent tax claim has been included which has been valued at the nominal tax rate of 20%.

4.2.1 Compensable tax losses

   
Amount as
at October 1
   
Loss in
2009/2010
   
Amount as
at
September
30, 2010
 
   
   
   
 
2008
    953,723       -       953,723  
2009
    804,373       -       804,373  
2009/2010
    -       1,586,223       1,586,223  
      1,758,096       1,586,223       3,344,319  

For the audit opinion we refer to the chapter “Other information” on page 28 of this report.
 
 
6

 

We trust that this report meets your requirement and we are willing to provide a more detailed explanation on request.

Waalwijk, December 17, 2010

Yours faithfully,

HLB Van Daal & Partners N.V.
Accountants & Consultants

Drs. E.A.A. van Iersel
Registeraccountant

 
7

 

Annual accounts 2009/2010

Hollandsche Exploitatie Maatschappij B.V.
Etten-Leur

Hollandsche Exploitatie Maatschappij B.V., Etten-Leur

 
8

 

Balance as at September 30, 2010
(after appropriation of result)

   
9/30/2010
   
9/30/2009
 
   
   
   
   
 
                         
Assets
                       
                         
Fixed assets
                       
                         
Intangible fixed assets (1)
                       
Patents
          86,694             56,765  
                             
Tangible fixed assets (2)
                           
Plant and equipments
    193,482               94,861          
Inventory
    55,283               37,616          
              248,765               132,477  
Non-current financial fixed assets (3)
                               
Other receivables
            669,689               352,482  
                                 
Current assets
                               
                                 
                               
Trade debtors
    4,135               38,493          
Current account group companies
    9,603               2,131          
Taxes and social securities
    38,471               56,559          
Other receivables, prepayments and accrued income
    1,768,375               1,023,779          
              1,820,584               1,120,962  
Cash and cash equivalents (5)
            5               149  
                                 
              2,825,737               1,662,835  
 
 
9

 
 
   
9/30/2010
   
9/30/2009
 
   
   
   
   
 
                         
Liabilities
                       
                         
Equity (6)
                       
Issued capital
    18,000             18,000          
Other reserves
    -2,666,396             -1,400,350          
              -2,648,396               -1,382,350  
Non-current liabilities (7)
                               
Non-current loans
            4,947,021               2,708,021  
                                 
Current liabilities (8)
                               
Banker
    3,327               1,615          
Creditors
    214,681               47,652          
Taxes and social securities
    9,137               5,327          
Other liabilities and accruals and deferred income
    299,967               282,570          
              527,112               337,164  
                                 
              2,825,737               1,662,835  

Hollandsche Exploitatie Maatschappij B.V., Etten-Leur

 
10

 

2   Profit & loss account for the year 2009/2010

   
2009/2010
   
2009
 
   
   
   
   
 
                         
Net turnover (9)
    132,953             87,876        
Cost of sales (10)
    183,104             120,079        
Gross operating result
            -50,151               -32,203  
Other operating income (11)
    51,000               -          
Bruto bedrijfsresultaat
            849               -32,203  
Wages and salaries (12)
    139,193               85,117          
Social security charges (13)
    21,845               3,416          
    1,081               -          
Depreciation tangible fixed assets (15)
    65,333               9,330          
Other operating expenses (16)
    1,417,351               615,260          
Total operating expenses
            1,644,803               713,123  
Operating result
            -1,643,954               -745,326  
Interest and similar income (17)
    198,647               4,155          
Interest and similar expenses (18)
    -137,946               -59,893          
Financial income and expenses
            60,701               -55,738  
Result on ordinary activities before taxation
            -1,583,253               -801,064  
Taxation on result of ordinary activities (19)
            317,207               161,557  
Result after taxation
            -1,266,046               -639,507  

Hollandsche Exploitatie Maatschappij B.V., Etten-Leur

 
11

 

3   General

Activities
The activities of Hollandsche Exploitatie Maatschappij B.V. consist mainly:
- The exploitation and sale of machinery, equipment for retail sale and all that is related or could be conducive to it.
- Performing age verification for sales of age-related items, everything in the broadest sense.

General
These financial statements are stated at historical value. The valuation principles and the principles for determination of results have not changed with regard to the previous financial year. The valuation principles are explained below. Unless otherwise mentioned the valuation is stated at face value.

Group structure
Hollandsche Exploitatie Maatschappij B.V. te Etten-Leur forms part of the economic unit (group). Wilroot B.V. te Etten-Leur is in charge of the group.

Estimates and assumptions
In preparing the financial statements the management has made estimates and assumptions that affect the amounts in the financial statements. Changes in estimates and assumptions may affect amounts reported in subsequent years. Actual results may differ from their estimates.

Assumption of continuity
The accounting policies for valuation and determination are based on the continuity assumption of the company. However, the survival of the company is uncertain because of the financial position of the company. A continuance of the company is however not impossible.

Changes in classification
The comparative figures have been reclassified for the understanding of the financial position of the company.

Principles of valuation of assets and liabilities

Intangible fixed assets
The intangible fixed assets are valued at purchase price less the depreciation calculated on the basis of estimated life span. The depreciation is a fixed percentage of the purchase price once revenues are generated related to the patents.

Tangible fixed assets
Tangible fixed assets are presented at cost less accumulated depreciation and, if applicable, less impairments in value. Depreciation is based on the estimated useful life and calculated as a fixed percentage of cost, taking into account any residual value. Depreciation is provided from the date an asset comes into use.

 
12

 

Non-current financial fixed assets
Deferred tax assets are included under the non-current financial assets as and when it is probable that realization of the tax claim in due course will be held. The deferred tax assets are valued at face value and have a long-term character.

Trade and other receivables
The receivables are included at face value. A provision has been deducted for doubtful debts where necessary. These debts are evaluated individually.

Principles for the determination of the result

Determination of the result
The result is determined based upon the difference between the net turnover and the costs and other expenses taken into account the accounting principles mentioned before.

Income and expenses are accounted for on accrual basis. Profit is only included when realized on the balance sheet date. Losses originating before the end of the financial year are taken into account if they have become known before preparation of the financial statements.

Net turnover
The net turnover is formed by the proceeds from the supply of products and services, subject to the deduction of the taxes and discounts granted payable over the turnover. Proceeds are accounted for in the year in which the goods were supplied or the services rendered.

Cost of sales
The cost of sales are the direct cost of the supplied products and services rendered. This includes the movement of devaluation caused by unsalable stocks.

Amortisation and depreciation
The depreciation on tangible fixed assets is calculated by using a fixed rate on the acquisition cost or cost of conversion.
Gains and losses on disposal of tangible fixed assets are recorded under amortization/depreciation, gains only to the extent that the gain is not capitalised deducted from replacement investments.

Taxation
The taxation on the result on ordinary activities is calculated at face value with due observance of fiscal facilities.

Principles for preparation of the cash flow statement
The cash flow statement has been prepared using the indirect method.

 
 
13

 

4   Notes to the balance sheet as at September 30, 2010

Assets

Fixed assets

1. Intangible fixed assets

   
Patents
 
   
 
Book value as at October 1, 2009
     
Purchase price
    56,765  
Accumulated amortization
    -  
      56,765  
Changes
       
Investments
    29,929  
Amortization
    -  
      29,929  
Book value as at September 30, 2010
       
Purchase price
    86,694  
Accumulated amortization
    -  
      86,694  
This concern paid for patents to perform age checks.
       
 
 
14

 
 
2. Tangible fixed assets

   
Plant and
equipments
   
Inventory
   
Total
 
   
   
   
 
Book value as at October 1, 2009
                 
Purchase price
    95,725       54,606       150,331  
Accumulated depreciation
    -864       -16,990       -17,854  
      94,861       37,616       132,477  
Changes
                       
Investments
    149,435       36,386       185,821  
Disposals
    -5,544       -       -5,544  
Depreciation
    -45,270       -18,719       -63,989  
      98,621       17,667       116,288  
Book value as at September 30, 2010
                       
Purchase price
    239,616       90,992       330,608  
Accumulated depreciation
    -46,134       -35,709       -81,843  
      193,482       55,283       248,765  
                         
Depreciation rates
                       
                   
%
 
Plant and equipments
                    20  
Inventory
                    20 - 25  

3. Non-current financial fixed assets

Other receivables

      2009/2010    
2009
 
   
   
 
Deferred tax assets for losses
             
Book value as at October 1
    352,482       190,925  
Movement
    316,382       161,557  
Book value as at September 30
    668,864       352,482  

The deferred tax asset are included in connection with tax losses. The deferred tax assets are calculated on the total tax loss of € 3.344.319 by September 30, 2010. The corporate tax rate is 20%. According to the management, the company will be profitable enough in the near future so that losses can be deducted.

 
15

 

      2009/2010    
2009
 
   
   
 
Deferred tax assets for valuation differences
             
Book value as at October 1
    -       -  
Movement
    825       -  
Book value as at September 30
    825       -  

These deferred tax assets have been formed due to a difference in between the fiar value and tax value of tangible fixed assets.

 
16

 

Current assets

4. Trade and other receivables

   
9/30/2010
   
09/30/2009
 
   
   
 
Trade debtors
           
Debtors
    4,135       38,493  
                 
Current account group companies
               
                 
Current account Wilroot B.V.
               
      2009/2010    
2009
 
   
   
 
                 
Book value as at October 1
    2,131       1,292  
Movement
    7,242       772  
      9,373       2,064  
Interest
    230       67  
Book value as at September 30
    9,603       2,131  
An interest rate of 4% has been calculated.
               
                 
   
9/30/2010
   
09/30/2009
 
   
   
 
Taxes and social securities
               
VAT
    38,471       56,559  
                 
Other receivables, prepayments and accrued income
               
Other receivables
    1,647,278       1,003,496  
Prepayments and accrued income
    121,097       20,283  
      1,768,375       1,023,779  
                 
Other receivables
               
Teleconnect Inc. receivable
    1,119,175       594,335  
DLB Finance & Consultancy B.V.
    26,180       13,090  
Current account Photo Wizz B.V.
    324,185       284,979  
Current account Marcus B.V.
    10,638       10,638  
Current account Giga Matrix Holding B.V.
    167,100       100,454  
      1,647,278       1,003,496  

 
17

 

   
9/30/2010
   
09/30/2009
 
   
   
 
Prepayments and accrued income
           
Rent building
    3,254       -  
Accrued interest loan receivable
    37,502       4,088  
To claim holiday legal obligations
    -       1,955  
ESF-grant
    25,500       -  
                 
To claim on Teleconnect Inc. paid expenses
    39,011       11,448  
Consultancy expenses
    6,250       -  
Prepaid expenses automation
    8,342       1,067  
Miscellaneous
    1,238       1,725  
      121,097       20,283  
                 
5. Cash and cash equivalents
               
Cash
    5       149  
 
 
18

 

6. Group equity

   
9/30/2010
   
09/30/2009
 
   
   
 
Issued capital
           
180 ordinary shares at par value € 100
    18,000       18,000  
                 
The statutory share capital amounts to € 90,000.
               
                 
      2009/2010    
2009
 
   
   
 
Other reserves
               
Book value as at October 1
    -1,400,350       -760,843  
Result financial year
    -1,266,046       -639,507  
Book value as at September 30
    -2,666,396       -1,400,350  

7. Non-current liabilities

   
9/30/2010
   
09/30/2009
 
   
   
 
Non-current loans
           
Non current loan Hombergh Holdings B.V.
    4,780,000       2,541,000  
Non current loan Geeris Holding Nederland B.V.
    167,021       167,021  
      4,947,021       2,708,021  
                 
      2009/2010    
2009
 
   
   
 
Non current loan Hombergh Holdings B.V.
               
Book value as at October 1
    2,541,000       930,000  
Borrowings
    2,239,000       1,611,000  
Book value as at September 30
    4,780,000       2,541,000  
Long-term part as at September 30
    4,780,000       2,541,000  

This loan of € 4,780,000 is granted to finance the activities of the company. Agreements on a repayment schedule have not been made. The interest rate is 4%.

      2009/2010    
2009
 
   
   
 
Non current loan Geeris Holding Nederland B.V.
             
Book value as at October 1
    167,021       167,021  
Book value as at September 30
    167,021       167,021  
Long-term part as at September 30
               

This loan of € 167,021 is granted to finance the activities of the company. Agreements on a repayment schedule have not been made. The loan is interest free.

 
19

 

8. Current liabilities

Banker

   
9/30/2010
   
09/30/2009
 
   
   
 
             
Fortisbank
    3,327       1,615  
                 
Taxes and social securities
               
Pay-roll tax
    8,056       5,327  
Pension premiums
    1,081       -  
      9,137       5,327  

 
20

 

   
9/30/2010
   
09/30/2009
 
   
   
 
Other liabilities and accruals and deferred income
           
Other liabilities
    -       165,000  
Accrued liabilities
    299,967       117,570  
      299,967       282,570  
                 
Accrued liabilities
               
Holiday money and days
    6,548       6,384  
Audit fees
    36,138       7,270  
Outstanding loan interest
    215,422       78,590  
Outstanding automation costs
    8,859       13,387  
Car expenses
    -       523  
Accomodation expenses
    33,000       11,000  
Miscellaneous
    -       416  
      299,967       117,570  

Off balance sheet commitments

Long-term financial obligations

Lease
The Company have liabilities arising from rental and operational lease commitments, which amount to € 48.172 (on a yearly basis or in total).

Rental commitments buildings
The Company and its group companies have long-term rental commitments until 2015, which relate to the rent of the office. The commitments amount to € 18.952 (on a yearly basis or in total).

 
21

 

Hollandsche Exploitatie Maatschappij B.V., Etten-Leur

5   Notes to the profit & loss account for the year 2009/2010

      2009/2010    
2009
 
   
   
 
9. Net turnover
             
Net turnover age verification
    7,200       5,400  
Net turnover call credits
    125,753       82,476  
      132,953       87,876  
                 
10. Cost of sales
               
Purchasing machines and equipment costs
    38,497       18,577  
K.P.N. IPVPN expenses
    20,196       19,260  
Purchasing call credits
    124,411       82,242  
      183,104       120,079  
                 
11. Other operating income
               
ESF Grant
    51,000       -  
                 
Employee expenses
               
                 
12. Wages and salaries
                 
Gross wages
    139,674       83,803  
Movement holiday money and days liability
    164       1,314  
      139,838       85,117  
Sick pay received
    -645       -  
      139,193       85,117  
                 
13. Social security charges
               
Social security charges
    21,845       13,068  
WBSO reductions
    -       -9,652  
      21,845       3,416  
                 
14. Pension expenses
               
Pension costs
    1,081       -  

 
22

 

Staff
During the 2009/2010 financial year, the average number of employees in the company, converted into full-time equivalents, amounted to 7 (2009: 4).

      2009/2010    
2009
 
   
   
 
15. Depreciation tangible fixed assets
             
Plant and equipments
    45,270       864  
Inventory
    18,719       8,466  
Book profit / loss
    1,344       -  
      65,333       9,330  
                 
16. Other operating expenses
               
Other employee expenses
    121,189       36,317  
Accomodation expenses
    32,699       38,589  
Office expenses
    150,551       89,476  
Car expenses
    72,695       43,299  
Selling expenses
    142,115       35,607  
General expenses
    898,102       371,972  
      1,417,351       615,260  
                 
Other employee expenses
               
Temporary workers
    111,038       29,310  
Canteen expenses
    7,933       6,496  
Occupational health service
    520       429  
Other employment expenses
    1,698       82  
      121,189       36,317  
                 
Accomodation expenses
               
Rent
    17,730       9,459  
Gas, water and electricity
    13,085       5,508  
Cleaning expenses
    1,009       419  
Security expenses
    351       2,252  
Renovation and maintenance
    524       20,951  
      32,699       38,589  

 
23

 

      2009/2010    
2009
 
   
   
 
Office expenses
             
Office supplies
    8,117       2,095  
Printer matters
    1,961       573  
Automation expenses
    127,043       76,936  
Postage
    640       127  
Contributions and subscriptions
    2,332       1,360  
Internet expenses
    9,918       8,318  
Other office supplies
    540       67  
      150,551       89,476  
                 
Car expenses
               
Fuels
    10,551       7,217  
Maintenance
    340       102  
Lease expenses
    45,523       31,170  
Parking charges
    3,786       4,243  
Rent cars
    3,111       977  
Other car expenses
    126       -  
      63,437       43,709  
Private use VAT contribution
    9,258       -410  
      72,695       43,299  
                 
Selling expenses
               
Publicity and advertisement
    76,138       4,310  
Representation expenses
    4,174       743  
Exhibition expenses
    5,147       4,200  
Travelling expenses
    16,271       16,733  
Food and beverage costs
    1,767       -  
Training store clerks
    3,415       -  
Presentation material
    29,977       1,989  
Kiosk expenses
    5,116       7,632  
Other cost of sales
    110       -  
      142,115       35,607  

 
24

 

      2009/2010    
2009
 
   
   
 
General expenses
             
Management fee
    703,246       260,576  
Administration costs and audit fees
    95,180       36,595  
Accounting expenses
    528       4,000  
Consultancy fees
    20,808       60,929  
Legal expenses
    11,780       9,071  
Notarial charges
    556       -  
Insurances
    1,034       235  
Patents expenses
    922       156  
Contributions and subscriptions
    270       137  
EDP audit
    9,600       -  
Expenses ESF project
    53,514       -  
Other general expenses
    664       273  
      898,102       371,972  
                 
Financial income and expenses
               
                 
      2009/2010    
2009
 
   
   
 
17. Interest and similar income
               
Interest receivable current account Wilroot B.V.
    232       67  
Interest loan receivable Teleconnect Inc.
    33,415       4,088  
Other financial benefits
    165,000       -  
      198,647       4,155  
                 
18. Interest and similar expenses
               
Interest and bank charges
    1,112       399  
Interest loan contracted
    136,834       59,494  
      137,946       59,893  
 
 
25

 

19. Taxation on result of ordinary activities
           
Movements in deferred tax assets
    -317,207       -161,557  

Etten-Leur, December 17, 2010
 
   
Wilroot B.V.
PECK Management B.V.
 
 
26

 
  
Other information

To the board of directors of Hollandsche Exploitatie Maatschappij B.V., Laakseweg 24, Etten-Leur

Independent auditor's report

Report on the financial statements
We have audited the accompanying financial statements for the year ended September 30, 2010 of Hollandsche Exploitatie Maatschappij B.V., Etten-Leur, which comprise the balance sheet as at September 30, 2010, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management's responsibility
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effictiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the financial statements
In our opinion, the financial statements give a true and fair view of the financial position of Hollandsche Exploitatie Maatschappij B.V. as ad September 30, 2010 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Waalwijk, December 17, 2010

HLB Van Daal & Partners N.V.
Accountants & Belastingadviseurs

(Signed)
Drs. E.A.A. van Iersel
Registeraccountant

 
27

 
 
Profit appropriation
Concerning the appropriation of profit the following has been determined in article 22 of the provisions of the articles of the company:

Paragraph 1
The profit is at the disposal of the general meeting of shareholders, if the meeting of priority shareholders not determines that a specific ammount will be reserved. Priority shares in any financial year will never pay dividends than a percentage of the amount paid on those shares, equal to the percentage which dividend is fixed.

Paragraph 2
The company may only make distributions of profits to shareholders to the extent that the shareholders' equity exceeds the paid and called up part of its capital plus the reserves which are required to be maintained by law.

Paragraph 3
There is distribution of profits after the adoption of the annual accounts showing that it is permissible.

Paragraph 4
The shares that the company holds in its own capital shall not be included for the purpose of calculating the profit distribution, unless a right of usufruct has been established on those shares in favour of persons other than the company or if depositary receipts were issued for those shares.

Paragraph 5
The company may make interim distributions provided that the requirements of paragraph 2 sub a have been met.

Paragraph 6
Dividends are payable one month after the adoption subject to the grant of this period by the general meeting of shareholders in the manner as it may determine.

Paragraph 7
Dividends revert to the company which are not available within five years from the date it has validated.

Establishment financial statements 2009
The financial statements of 2009 have been established by the General Shareholders' Meeting held on February the 22th, 2010. The proposal of the appropriation of profits, as processed in the financial statements, have been approved unaltered.

Recognition of the loss for 2009/2010
The board of directors proposes to exclude the 2009/2010 result to the other reserves for an amount of € negative € 1,266,046. The General Meeting of Shareholders Shareholders will be asked to approve the appropriation of the 2009/2010 result, this proposition is already recognised in the financial statements.
 
 
28

 

Other information

To the board of directors of Hollandsche Exploitatie Maatschappij B.V., Laakseweg 24, Etten-Leur

Independent auditor's report

Report on the financial statements
We have audited the accompanying financial statements for the year ended September 30, 2009 of Hollandsche Exploitatie Maatschappij B.V., Etten-Leur, which comprise the balance sheet as at September 30, 2009, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management's responsibility
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effictiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the financial statements
In our opinion, the financial statements give a true and fair view of the financial position of Hollandsche Exploitatie Maatschappij B.V. as ad September 30, 2009 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Waalwijk, December 17, 2010

HLB Van Daal & Partners N.V.
Accountants & Belastingadviseurs

(signed)
Drs. E.A.A. van Iersel
Registeraccountant
 
 
29

 

Item 9.02 – Audited financial statements 2010 of Wilroot B.V

at Etten-Leur
Wilroot B.V.
at Etten-Leur

Ref.          11389/EIE/MLE/MCR/MSS/2010/10
Waalwijk December 17, 2010

Contents
Pagina
   
Report of the auditors
 
1  General
1
2  Tax position
2
   
Financial statements
 
1  Balance as at September 30, 2010
5
2  Profit & loss account for the year 2010
6
3  General
7
4  Notes to the balance sheet as at September 30, 2010
9
5  Notes to the for the year 2010
13
   
Other information
 
1   Independent auditor's report
15
2  Profit appropriation
16
3  Establishment financial statements 2009
16
4  Recognition of the loss for 2010
16
   
Annexes
 

 

 

To the board of directors of
Wilroot B.V.
Laakseweg 24
4874 LV Etten-Leur

Ref.          11389/EIE/MLE/MCR/MSS/2010/10
Waalwijk December 17, 2010

Dear Sirs,

Herewith we report in draft on the annual accounts of Wilroot Maatschappij B.V. regarding the financial year 2010.

1.1 Board composition
The management of the company was as follows:
- Director: DLB Finance & Consultancy B.V.
- Director: Marcus Communicatie B.V.
- Director: Sciarone Interim Sales B.V.
- Director: HITD Information technology B.V.

1.2 Amendment of the articles association
There has been a change of the financial year 2010. The financial year 2010 starts on January 1th and ends on September 30th. The next financial year starts on October 1st and ends on September 30th, a financial year not coinciding with a calender year. An alteration of the articles of association is formaliced on October the 15th, 2010.

 
1

 

2 TAX POSITION

2.1 Taxable amount 2010
The taxable amount for 2010 has been calculated as follows:
   
2010
 
   
 
       
Result before taxation
    -19,534  
Tax differences:
       
Non-deductible expenses
    51  
Taxable amount 2010
    -19,483  

No company tax is to be paid over the taxable amount.

2.2 Carry back
 
As per September 30, 2010 the compensable losses amount to € 22.612.
These losses could be compensated within a term of nine years with future fiscal profits.

For these compensable losses a latent tax claim has been included which has been valued at the nominal tax rate of 20%.

Compensable tax losses
   
Amount as
at January 1
   
Loss in
2010
   
Amount as
at
September
30, 2010
 
   
   
   
 
2009
    3,129       -       3,129  
2010
    -       19,483       19,483  
      3,129       19,483       22,612  

For the audit opinion we refer to the chapter “Other information” on page 16 of this report.

We trust that this report meets your requirement and we are willing to provide a more detailed explanation on request.

Waalwijk, December 17, 2010

Yours faithfully,

HLB Van Daal & Partners N.V.
Accountants & Belastingadviseurs

Drs. E.A.A. van Iersel
Registeraccountant

 
2

 

Annual accounts 2010

Wilroot B.V.
Etten-Leur

Wilroot B.V., Etten-Leur

 
3

 

1   Balance as at September 30, 2010
(after appropriation of result)
   
9/30/2010
   
2009
 
   
   
   
   
 
                         
Assets
                       
                         
Fixed assets
                       
                         
Intangible fixed assets (1)
                       
Patents
          5,579       -        
                             
Non-current financial fixed assets (2)
                           
Investments in group companies
    -               -        
Other receivables
    4,523               626        
              4,523               626  
Current assets
                               
                               
                                 
Taxes and social securities
            897               -  
                                 
Cash and cash equivalents (4)
            51               -  
                                 
              11,050               626  

 
4

 

   
9/30/2010
   
2009
 
   
   
   
   
 
                         
Liabilities
                       
                         
Equity (5)
                       
Issued capital
    18,000             18,000        
Other reserves
    -36,140             -20,503        
              -18,140               -2,503  
Current liabilities (6)
                               
Banker
    -               109          
Creditors
    7,039               -          
Current account group companies
    9,603               3,020          
Other liabilities and accruals and deferred income
    12,548               -          
              29,190               3,129  
                                 
              11,050               626  

Wilroot B.V., Etten-Leur

 
5

 

2   Profit & loss account for the year 2010
   
2010
         
2009
       
   
   
   
   
 
    7,548             -        
    4,865             -        
    192             -        
General expenses (10)
    6,620             1,661        
Total operating expenses
            19,225               1,661  
Operating result
            -19,225               -1,661  
Financial income and expenses (11)
            -309               -172  
Result on ordinary activities before taxation
            -19,534               -1,833  
Taxation on result of ordinary activities (12)
            3,897               367  
Result after taxation
            -15,637               -1,466  

Wilroot B.V., Etten-Leur

 
6

 

3   General

Activities
The activities of Wilroot B.V., with registered offices in Etten-Leur, and its group holdings consist mainly of the following:
- Creating, acquiring and disposing of companies;
- the acquiring and disposing of interests in them;
- to manage the affairs of companies;
- and the finance of companies.

General
These financial statements are stated at historical value. The valuation principles and the principles for determination of results have not changed with regard to the previous financial year. The valuation principles are explained below. Unless otherwise mentioned the valuation is stated at face value.

Group structure
Wilroot B.V. te Etten-Leur forms part of the economic unit (group). Wilroot B.V. te Etten-Leur is in charge of the group.

Group structure
In accordance with article 2:407 part 2A of the Netherlands Civil Code no consolidated financial statements have been prepared.

Assumption of continuity
The accounting policies for valuation and determination are based on the continuity assumption of the company. However, the survival of the company is uncertain because of the financial position of the company. A continuance of the company is however not impossible.

Staff members
During the 2010 financial year the company has no employees, and hence incurred no wages, salaries or related soceial security charges, nor during the previous period.

Principles of valuation of assets and liabilities

Intangible fixed assets
The intangible fixed assets are valued at purchase price less the depreciation calculated on the basis of estimated life span. The depreciation is a fixed percentage of the purchase price once revenues are generated related to the patents.

 
7

 

Non-current financial fixed assets
Investments in group companies are presented in the balance sheet based on their net asset value in accordance with the accounting principles of these annual accounts.

Investments in group companies with a negative net asset value are valued at zero, unless the company is, wholly or partly, responsible for the debts of the group company.

Deferred tax assets are included under the non-current financial assets as and when it is probable that realization of the tax claim in due course will be held. The deferred tax assets are valued at face value and have a long-term character.

Trade and other receivables
The receivables are included at face value. A provision has been deducted for doubtful debts where necessary. These debts are evaluated individually.

Principles for the determination of the result

Determination of the result
The result is determined based upon the difference between the net turnover and the costs and other expenses taken into account the accounting principles mentioned before.
Income and expenses are accounted for on accrual basis. Profit is only included when realized on the balance sheet date. Losses originating before the end of the financial year are taken into account if they have become known before preparation of the financial statements.

Taxation
The taxation on the result on ordinary activities is calculated at face value with due observance of fiscal facilities.


 
8

 

4   Notes to the balance sheet as at September 30, 2010

Assets

Fixed assets
1.  Intangible fixed assets

   
Patents
 
   
 
Book value as at January 1, 2010
     
Purchase price
    -  
Accumulated amortization
    -  
      -  
Changes
       
Investments
    5,579  
Amortization
    -  
      5,579  
Book value as at September 30, 2010
       
Purchase price
    5,579  
Accumulated amortization
    -  
      5,579  

 
9

 

2.  Non-current financial fixed assets

Investments in group companies

   
2010
   
2009
 
   
   
 
Hollandse Exploitatie Maatschappij B.V.
           
The net asset value as at September 30, 2010 amounts to                   € 2.648.396 negative (as at December 31, 2009 € 1.650.568).
           
Book value as at January 1
    -       -  
Share in result
    -997,828       -907,725  
      -997,828       -907,725  
Adjustment because of valuation at zero
    997,828       907,725  
Book value as at September 30
    -       -  
                 
This is a 100% subsidary.
               
                 
Other receivables
               
                 
Deferred tax assets for losses
               
Book value as at January 1
    626       259  
Movement
    3,897       367  
Book value as at September 30
    4,523       626  
The deferred tax assets are included in connection with tax losses. The deferred tax asset is calculated on the total tax loss of € 22.612 by September 30, 2010. The corporate tax rate is 20%. According to the management, the company will be profitable enough in the near future so that losses can be deducted.

Current assets

3.  Trade and other receivables

   
9/30/2010
   
12/31/2009
 
   
   
 
Taxes and social securities
           
VAT
    897       -  
                 
4.  Cash and cash equivalents
               
ABN AMRO Bank N.V.
    51       -  

 
10

 

Equity and liabilities

5.  Equity

   
9/30/2010
   
12/31/2009
 
   
   
 
Issued capital
           
180 ordinary shares at par value € 100
    18,000       18,000  
                 
The statutory share capital amounts to € 90,000.
               
                 
   
2010
   
2009
 
   
   
 
Other reserves
               
Book value as at January 1
    -20,503       -19,037  
Result financial year
    -15,637       -1,466  
Book value as at September 30
    -36,140       -20,503  
                 
6.  Current liabilities
               
                 
Banker
               
                 
   
9/30/2010
   
12/31/2009
 
   
   
 
Current account group companies
               
Hollandse Exploitatie Maatschappij B.V.
    9,603       3,020  
                 
   
2010
   
2009
 
   
   
 
Hollandse Exploitatie Maatschappij B.V.
               
Book value as at January 1
    3,020       1,292  
Movement
    6,351       1,661  
      9,371       2,953  
Interest
    232       67  
Book value as at September 30
    9,603       3,020  
An interest rate of 4% has been calculated.
               

 
11

 

Other liabilities and accruals and deferred income
           
   
9/30/2010
   
12/31/2009
 
   
   
 
Accrued liabilities
           
Aministration and audit fees
    5,000       -  
Accomodation expenses
    7,548       -  
      12,548       -  

Off balance sheet commitments

Long-term financial obligations

Rental commitments buildings
The Company and its group companies have long-term rental commitments until 2015, which relate to the rent of the office. The commitments amount to € 11.328 (on a yearly basis or in total).

Wilroot B.V., Etten-Leur

 
12

 

5.  Notes to the for the year 2010

Staff
During the 2010 financial year the company has no employees, and hence incurred no wages, salaries, or related social securities, nor during the previous year.

Other operating expenses

   
2010
   
2009
 
   
   
 
7.  Accomodation expenses
           
Rent
    6,160       -  
Gas, water and electricity
    844       -  
Cleaning expenses
    544       -  
      7,548       -  
                 
8.  Office expenses
               
Automation costs
    1,559       -  
Office equipment
    3,306       -  
      4,865       -  
                 
9.  Selling and distribution expenses
               
Representation costs
    192       -  
                 
10.  General expenses
               
Administration costs and audit fees
    6,467       -  
Other general expenses
    153       1,661  
      6,620       1,661  
                 
11.  Financial income and expenses
               
Interest and similar expenses
    -309       -172  
                 
   
2010
   
2009
 
   
   
 
Interest and similar expenses
               
Interest and bank charges
    77       105  
Interest payable Hollandse Exploitatie Maatschappij B.V.
    232       67  
      309       172  

 
13

 

12.  Taxation on result of ordinary activities
           
Movements in deferred tax assets/liabilities
    -3,897       -367  

Etten-Leur, December 17, 2010
 
   
Dlb Finance & Consultancy B.V.
Sciarone Interim Sales B.V.
   
Marcus Communicatie B.V.
 

 
14

 
 
Other information

To the board of directors of Wilroot B.V., Laakseweg 24, Etten-Leur

Independent auditor's report

Report on the financial statements
We have audited the accompanying financial statements for the year ended September 30, 2010 of Wilroot B.V., Etten-Leur, which comprise the balance sheet as at September 30, 2010, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management's responsibility
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effictiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the financial statements
In our opinion, the financial statements give a true and fair view of the financial position of Wilroot B.V. as at September 30, 2010 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Waalwijk, December 17, 2010

HLB Van Daal & Partners N.V.
Accountants & Belastingadviseurs

Drs. E.A.A. van Iersel
Registeraccountant

 
15

 

Profit appropriation

Concerning the appropriation of profit the following has been determined in article 21 of the provisions of the articles of the company:

Paragraph 1
The profit is at the disposal of the general meeting of shareholders.

Paragraph 2
The company may only make distributions of profits to shareholders to the extent that the shareholders' equity exceeds the paid and called up part of its capital plus the reserves which are required to be maintained by law.

Paragraph 3
There is distribution of profits after the adoption of the annual accounts showing that it is permissible.

Paragraph 4
The shares that the company holds in its own capital shall not be included for the purpose of calculating the profit distribution, unless a right of usufruct has been established on those shares in favour of persons other than the company or if depositary receipts were issued for those shares.

Paragraph 5
The company may make interim distributions provided that the requirements of paragraph 2 sub a have been met.

Establishment financial statements 2009
The financial statements of 2009 have been established by the General Shareholders' Meeting held on Mai 4th, 2010. The proposal of the appropriation of profits, as processed in the financial statements, have been approved unaltered.

Recognition of the loss for 2010
The board of directors proposes to exclude the 2010 result to the other reserves for an amount of € negative € 15,637. The General Meeting of Shareholders will be asked to approve the appropriation of the 2010 result, this proposition is already recognised in the financial statements.

List of participating interests

Name
 
Registered office
 
Share in
issued
capital
 
       
%
 
Hollandse Exploitatie Maatschappij B.V.
 
Etten-Leur
 
100
 
 
16

 
Other information

To the board of directors of Wilroot B.V., Laakseweg 24, Etten-Leur

Independent auditor's report

Report on the financial statements
We have audited the accompanying financial statements 2009 of Wilroot B.V., Etten-Leur, which comprise the balance sheet as at December 31, 2009, the profit and loss account for the year then ended and the notes, comprising a summary of the accounting policies and other explanatory information.

Management's responsibility
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore management is responsible for such internal control as it determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. This requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effictiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion with respect to the financial statements
In our opinion, the financial statements give a true and fair view of the financial position of Wilroot B.V. as at December 31,2009 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

Waalwijk, December 17, 2010

HLB Van Daal & Partners N.V.
Accountants & Belastingadviseurs

Drs. E.A.A. van Iersel

 
17

 
 
Annex 1

Annual accounts 2010

Wilroot B.V., Etten-Leur
Consolidated balance as at September 30, 2010
(after appropriation of result)

   
9/30/2010
 
   
   
 
             
Assets
           
Fixed assets
           
Intangible fixed assets
           
             
Patents
          92,273  
               
Tangible fixed assets
             
               
Plant and equipments
    193,482          
Inventory
    55,283          
              248,765  
Non-current financial fixed assets
               
                 
Other receivables
            674,212  
                 
Current assets
               
               
                 
Trade debtors
    4,135          
Current account group companies
    0          
Taxes and social securities
    39,368          
Other receivables, prepayments and accrued income
    1,768,375          
              1,811,878  
Cash and cash equivalents
            56  
                 
              2,827,184  

 

 

   
9/30/2010
 
   
   
 
             
Liabilities
           
             
Group equity
          -2,666,536  
               
Non-current liabilities
             
               
Non-current loans
          4,947,021  
               
Current liabilities
             
               
Banker
    3,327          
Creditors
    221,720          
Taxes and social securities
    9,137          
Current account group companies
    0          
Other liabilities and accruals and deferred income
    312,515          
              546,699  
                 
              2,827,184  

Group equity according to the above figures differs from the equity in the company balance sheet of Wilroot B.V. This is due to the valuation of the investment in Hollandsche Exploitatie Maatschappij B.V. at zero in the company balance sheet of Wilroot B.V.. Group equity is therefore € 2.648.396 less.

 

 

Annex 2

Wilroot B.V., Etten-Leur
Consolidated profit & loss account for the year 2009/2010

   
October 1st 2009 until September 30th 2010
 
   
   
 
             
Net turnover
    132,953        
Cost of sales
    183,104        
Gross operating result
            -50,151  
Other operating income
            51,000  
              849  
                 
Wages and salaries
    139,193          
Social security charges
    21,845          
    1,081          
Depreciation tangible fixed assets
    65,333          
Other employee expenses
    121,189          
Accomodation expenses
    40,247          
Office expenses
    155,416          
Car expenses
    72,695          
Selling expenses
    142,307          
General expenses
    904,722          
Total operating expenses
            1,664,028  
                 
Operating result
            -1,663,179  
                 
Interest and similar income
    198,415          
Interest and similar expenses
    -138,023          
Financial income and expenses
            60,392  
Result on ordinary activities before taxation
            -1,602,787  
                 
Taxation on result of ordinary activities
            321,104  
                 
Result after taxation
            -1,281,683